You Need to Pledge to a Cardano Pool. Here is Why.

March 11th, 2019


Letter k in Sign Language

In respect of, "You Need a Cardano Pool. Here’s Why" by Yanik Koval 1 & dLab/Emurgo. 2

In that post Mr. Koval refers to a confederation of 1,000 Cardano pools as a means to an end:

Imagine a world where Cardano pools not only stand for a consensus process, but support related projects, solve the real issues, try out new hardware ideas, or work on marketing, education, and communication.

Sounds fantastic I thought but where did that 1,000 pool number come from?

It's a made up number, not based on any Cardano performance metric, that's where that number came from, thin air.

April 11, 2019
It appears that Cardano change the k value: 3

Even if every user were to run a node that was online all the time, it would be hard to keep all those nodes well enough in sync to avoid forks and still keep a short slot length. Our delegation design is aimed at keeping the number of nodes that produce a significant amount of blocks reasonably small (about 100 or 1000 nodes), so that effective communication between them is feasible.

Cardano knew this and planned for it, by implementing a variable target k, designed to maintain equilibrium between efficiency and decentralization.

The variable k is currently set at 100 or 1,000 stake pools but could be a different number entirely when Shelley launches and is expected to change over time. 4

900 problems but dead pools ain’t one

900 problems but dead pools ain’t one

A dead pool is a pool that does not contribute enough value to Cardano's ecosystem and thus few to no one delegates to that pool.

In Cardano's framework, a dead pool is one that does not make it into k.

dead pool > k

Every Cardano stake pool confederation should be targeting k spots first, and only if they cannot make the k, go another route.

By getting your stake pool into k you are operating a competitive pool, thus walking the line between efficiency and decentralization.

I know what you are thinking, how? No one in our confederation has enough Ada to get us into k.

It's true, the top stake pools (k) will probably be backed up by a lot of Ada. How much Ada is a variable, unknown until the pools launch, also keep in mind this backing variable will change over time, could go up or down, it's left to the pool operator to keep their pool competitive, and this is one of those competitive variables that does just that.

We Pledge

Fortunately, Cardano planned for more than one owner stake pools by adding the variable pledge into their framework.

The k variable maintains equilibrium between efficiency and decentralization, while the pledge variable fulfills on maximizing the number of pool owners within k.

A group can pledge their individually held Ada to a pool, thus making their Cardano confederation pool more competitive, and making Cardano more decentralized to boot.

Moreover, competitive stake pools will be exposed to end users first by having higher ranking in Cardano wallets as a delegation choice. The stake pools that make the k does not have to go out and ask for Ada they will be saturated naturally, by design.

900 problems but dead pools ain’t one

The goal of every Cardano stake pool confederation should be to reach for those coveted k spots, first, and only if pledging isn't enough to make their pool competitive go down a different path.

I don't have to imagine that world, and now neither do you, Cardano already has planned for it.

Get your Cardano stake pool into k, be competitive, get pledging.

  1. You Need a Cardano Pool. Here’s Why by Yanik Koval on Medium. ↩︎

  2. dLab/Emurgo a blockchain startup accelerator and venture studio. ↩︎

  3. Delegation Design Specification on GitHub, dated April 11, 2019. ↩︎

  4. Delegation Design Specification on GitHub. ↩︎

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